New York City has been crumbling under the pressure of a homeless crisis - but an innovative experiment could turn the tide

Landing Road is the city's newest homeless shelter, located on a cul-de-sac overlooking the Major Deegan expressway in the Bronx. The bottom two floors are a 200-bed shelter for single men. The rest of the building is affordable apartments ranging from $470 to $1000 a month.

1/24

The facility's model is based on the commonly accepted idea that the city's homelessness issue is tied to a lack of affordable housing. "The new face of homelessness," Banks told Business Insider, is working people who fall into the shelter system because their income can't cover their rent.

2/24

Since 1994, homelessness has exploded by over 100% in New York, while rents have gone up around 19% in real dollars, household income has actually gone down 6.3%, and the city has lost hundreds of thousands of rent-stabilized apartments.

Last year, the De Blasio administration launched its Turning The Tide program, a multi-pronged effort to stem the homelessness issue by revamping the shelter system with 90 new shelters, as well as an affordable housing plan that calls for building or preserving 200,000 units of affordable housing by 2022.

The plan also launched rental assistance and rehousing programs like Living in Communities (LINC), which helps people move out of shelters. But Banks said those efforts have taken time to develop because the administration has had to rebuild the programs from scratch after similar programs were discontinued under Bloomberg.

5/24

The most visible result of the Turning The Tide program so far has been the revamping of the shelter system. In the last year, the city has opened 11 new shelters, Landing Road being one of them, with another six set to open by June.

6/24

Some experts, like Padgett, the NYU professor, have criticized the city's focus on the shelter system, saying that it is costly and outdated. The Department of Housing and Urban Development said in December that it is more "efficient and effective" to put funding directly towards housing and support services for the homeless, a strategy known as Housing First.

7/24

A number of research studies have found Housing First to be more effective for alleviating homelessness for families experiencing temporary homelessness, for those suffering chronic homelessness, and even those with substance and mental health issues.

"The whole country is moving in that direction," Dennis Culhane, a professor at the University of Pennsylvania and a leading researcher on homelessness, told Business Insider.

Rosenblatt said that because New York is mandated to provide shelter to anyone homeless, there is a lot of pressure on the system. It's hard to divert shelter funds to housing when the city is just trying to stay above water on the shelter population.

8/24

Rosenblatt said that he hopes that Landing Road and other facilities like it will eventually take pressure off the shelter system, giving the city the space to shrink the shelter system, get rid of poorly performing shelters, and focus on quality providers.

"The city likes to buy quality, but all they can afford to buy is quantity," he said. "If we can take some pressure off the system, the city is in a position to say to providers you need to compete. We're only going to keep the beds that give us the greatest bang for our buck."

Currently, New York has around 60,000 people in homeless shelters around the city. In Rosenblatt’s view, if you could take even a third of the shelter system and convert it to Landing Road-esque facilities, you could generate enough subsidies to support 10,000 permanent low-income units without changing how the city spends its funds.

But making that kind of impact on "throughput" (i.e. moving more people from shelters to permanent housing) is contingent on nonprofits following the Landing Road model, which is no simple task.

10/24

Creating a facility like Landing Road requires a lot of upfront capital, which most nonprofits don't have. BRC was able to build Landing Road due to a stroke of good luck, according to Rosenblatt.

Several years ago, a developer bought out the nonprofit from a 25-year commercial lease on Manhattan's Lower East Side that provided enough funds for a down payment on the Landing Road property and the costly pre-development activities like zoning analysis and design that are the primary barriers to developing new projects.

But that was more or less a one time deal.

BRC is now raising money, using Landing Road as a proof-of-concept, to open two more similar facilities. Rosenblatt said BRC has secured $2 million in funds out of a goal of $7 million.

11/24

Landing Road is one of BRC's "employment shelters," meaning it focuses on single adults without severe mental health disorders or substance abuse issues who are able to work, are in job training, or are searching for work with BRC's help. Most are likely at the facility due to job loss or difficulty finding housing they can afford.

12/24

Other shelters in the system focus on high-needs individuals who may just be coming off the street or suffering from severe disorders.

13/24

Those shelters, often called Safe Havens, have few rules around hygiene, curfew, or sobriety in order to use the shelter. Landing Road meanwhile has strict rules on those points, like the requirement that clients not stay in the dorms after a certain hour of the morning.

According to Padgett, if any shelter provider is going to experiment with a model like this, BRC has one of the best track records in the city. While the average stay for a single adult at a shelter is around 335 days, for BRC’s "employment shelters," it is only 220 days.

Each client gets 60 square-feet of space and beds are required to be separated by three feet. Linens, blankets, and toiletries are stocked in each client's locker, which also comes with a lock. "It's like a mix between college and sleep-away camp," joked Rosenblatt.

15/24

Rosenblatt said the decision to focus on an employment shelter came from data about their clients. "We were seeing that our clients were finding jobs and moving out, but that they were coming back at higher rates than they were before," he said. "But they weren't coming back because of relapse or criminal activity, but because they were struggling."

16/24

The city is working to create more modern, high-quality shelters like Landing Road in an effort to get more people off the street. But many homeless see the shelter system as a dangerous, restrictive place. DHS spokesman Isaac McGinn said that's more perception than reality.

17/24

"If the last time you engaged with the shelter system was the '90s, your impression of what it can offer you is very different," he told Business Insider.

For decades, the city has relied on so-called "cluster sites," apartments rented out by the city at market rates or costly hotel rooms, to meet its demand for shelter. Those sites were often held in subpar buildings.

The Turning the Tide program called for eliminating the 360 cluster sites, of which 42% have since been closed.

Banks similarly suggested that Landing Road is the city's "new approach" to shelters due to the facility being specifically built for housing the homeless, its non-profit ownership, and focus on a specific population. For example, free laundry is available on-site.

18/24

"It is a purpose-built location with not-for-profit ownership. Those are qualities that we are encouraging our not-for-profit partners like BRC to pursue," said Banks.

The administration is focusing on developing facilities like Landing Road designed to provide services to specific populations like those mental health issues, seniors, young people in the LGBTQI community, or families. BRC added this patio area so that clients have a space to hang out outside without incurring questions from the community.

19/24

"People have a right to hangout, but we don't want to make our clients' lives any more difficult. We thought why don't we just give them a space to hang out outside," Rosenblatt said.

According to Rosenblatt, it's something of a no-brainer for the city and other nonprofits to develop shelters like Landing Road. BRC is paying almost half-as-much per square foot as other shelters, according to Rosenblatt, and getting a brand new facility that also generates subsidies for housing.

20/24

Apartments in the building are split between 111 studios and 24 one- and two-bedroom apartments. The studios, which will go to formerly homeless people, cost $470 per month. The one- and two-bedrooms cost around $714 and $1000 respectively, and will go to community members by lottery.

21/24

While Padgett said she likes the idea of creating more affordable housing with the model, she worries that it will be hard for those living there to get away from the "institutional" nature of the building.

22/24

"When I hear these types of institutional solutions, it's still living in a segregated, supervised program setting," she said.

The larger issue for Padgett is that developing and running a facility like Landing Road costs a lot more money than other solutions.

23/24

"When I see all the money going into shelters, all I see is that money going into temporary solutions. When that same money could sustain a lot of families with rental subsidies and not have to live in a institutional environment," she said.

Still, for Rosenblatt, the Landing Road model represents an opportunity to show nonprofits that they can make a difference in the affordable housing crisis, and thus homelessness, simply by changing how they operate.

24/24

"It's about creating places of transformation," said Rosenblatt. "How do we use this opportunity to invest in people, achieve results, and do it in a way that's motivational and effective."